The assertion that 'piracy is not theft' is a distraction (see: Red Herring) which contains elements of truth and falsehood.

Semantics and Frame

As a legalese argument, one my be able to demonstrate that "piracy" does or does not fit a particular definition for "theft." One may also appeal to piracy as theft or not-theft in an economic, practical, or ethical context. Primarily, what the label "theft" or "not theft" accomplishes is:

By attaching the label "theft" one implicitly seeks to attach any unjust/illegal/immoral attributes to piracy, and therefore impermissible.

By detaching the label "theft" one implicitly seeks to detach any unjust/illegal/immoral attributes from piracy, and therefore permissible.

Regardless the label or emotional appeal, the underlying actions, ethics, practical effects, and economics remain entirely unchanged. The only thing that actually changes is in one's mind, making this labeling primarily "decoration" or an emotional appeal.

Piracy as Theft?

More important than semantics, when one says "piracy is theft" or makes similar equivocations, typically one intents to imply that either (a) piracy is a property violation, (b) piracy and theft are equivalent or similar according to some economic, practical, or ethical standard.

Property Violations

Often, when one asserts "piracy is not theft" they implicitly mean to assert "therefore not a property violation." Similarly, when one asserts "piracy is theft" they often implicitly intend to assert "therefore a property violation."

Theft is merely one type of property violation, but not the only type of property violation. Trespass and property damage are two other commonly recognized property violation categories. Other more abstracted forms of violations may include things like pollution, fraud, and extortion.

Even if one demonstrates piracy & theft are distinct, the question of piracy (or other IP violations) as property violations still remains as piracy may be it's own category of property violation, or qualify under another category of property violation.

When considering the above, be cautious of the following circular arguments; either (a) intangibles may be owned, and therefore their ownership may be violated or (b) intangibles may not be owned, and therefore their ownership may not be violated.

Story of the Farmer

Often, when one refers to piracy as theft, they are equating the underlying ethical, practical, or economic implications of piracy.

A farmer invests himself and owned-resources into the production of a tomato, and places that tomato at his market. The farmer has no personal use for that tomato, and if not sold, would simply throw the tomato into a compost pile. As such the tomato itself as an object has no personal value to the farmer. The relevance and value of the tomato to the farmer is that he may trade this tomato for other forms of value that he desires. If a thief steals this tomato, while -yes- the farmer has lost possession of a physical object, more important is the loss of tradable -value. The thief takes value for himself at the expense of the farmer.

An artist invests himself and owned-resources into the production of an artwork, and places that artwork at his market. The artist has no personal use for that artwork, and if not sold, would simply sit idle. As such the artwork itself as an object has no personal value to the artist. The relevance and value of the artwork to the artist is that he may trade this artwork for other forms of value that he desires. If a pirate pirates this artwork, while -yes- the artist has lost no physical object, more important is the loss of tradable -value. The pirate takes value for himself at the expense of the artist.

One should be able to recognize the reasonable comparison between the farmer/thief and artist/pirate scenarios, even if one disagrees on the implications of the nuanced differences.

Conclusion

"Piracy is theft" is entirely a distraction (see: Red Herring) with little bearing on ethics, practical considerations, or economics. Regardless of the label theft or non-theft, what remains is (a) piracy described as violations of ownership, and (b) the ethical and practical similarities between piracy and theft.